13 Senators and 25 Congressmen Have Bought Into the Risky Investment Culture of JPMorgan

I’ve always liked the phrase “vicious cycle.” In fact, vicious is a damn good word. The first definition of the word “vicious” that I could find was “addicted to or characterized by vice; grossly immoral. Vicious is the perfect word to describe the effect of money in politics. Unfortunately for us, the cycle of corruption is hard to break.

We’ve all heard of the amount of money that flows into the campaigns of Democrats and Republicans in Washington from unions and corporations. There is a clear quid pro quo exchange of campaign contributions for favorable legislation, and it’s undeniable. When we hear about corruption in politics, this is the type most commonly referred to.

There is another type of conflict of interest, however, that is not talked about as much, and it may be even more dangerous -- if not subtle. While corporations are investing in legislators through campaign contributions and TV ads, politicians are investing in corporations, creating a vicious cycle of sound judgment being traded for wealth.

The increasing cost of running for and winning seats in the House and Senate has created an increasingly wealthy class of senators and representatives. Many of these politicians have significant investments in financial institutions -- the same financial institutions that they are supposed to create legislative regulations for and the same institutions that are losing massive amounts of shareholder money on risky bets.

Overly loose regulations of the financial market make sense if you want to get rich quick on short-term gains. But they make no sense if you want sound long-term financial institutions.

JPMorgan Chase has been in the news lately for losing an estimated $6 billion (and likely to be more) of shareholder’s money making risky derivatives investments. These same types of investments are the ones that caused the financial collapse and subsequent recession in 2008. We expect our legislators in Washington have learned from the traumatic events of the Great Recession. They haven’t. Instead, they’ve literally bought into the culture of risky investments. They’ve put their own money down on the blackjack table.

According to OpenSecrets.org, a nonprofit non-partisan watchdog group, 15 Democrats and 23 Republicans owned shares in JPMorgan Chase worth a total of between $2.1 million and $3.8 million as of 2010. The single biggest shareholder in the Senate was Sen. Frank Lautenberg (D-N.J.), who reported owning at least $1,000,001 in JPMorgan Chase stock. Other investors in the Senate include Tom Coburn, Claire McCaskill, Orrin G. Hatch among the list of 13. That’s 13% of the Senate that has personally bought in to this risky investment culture of JP Morgan Chase.

The House of Representatives isn’t any better. According to Open Secrets, the top JPMorgan Chase investor in the House was Rep. Leonard Lance (R-N.J.), who had invested $250,000 in the company as of 2010. In all, 25 in the House have invested in JPMorgan Chase.

Our representatives in Washington, in both parties, have bought into the risky investment culture of JPMorgan Chase and other financial giants that gamble on derivatives. They have bought in to the “Wall Street” mindset that this system, the way it is, is a good thing. This results in a feedback loop of money and ignorance between Congress and Wall Street, and we the people are left out of the loop.